Supply Chain Disclosure Disclosure Under the California Transparency
Total Page:16
File Type:pdf, Size:1020Kb
Supply Chain Disclosure Disclosure under the California Transparency in Supply Chains Act and UK Modern Slavery Act This Statement relates to our fiscal year ended March 30, 2019 (“fiscal 2019”) except as otherwise updated herein. This Statement describes the activities of Capri Holdings Limited and its consolidated subsidiaries (collectively, “Capri Holdings,” the “Company,” “we” or “our”) to address modern slavery risks in our business and supply chains. We have prepared a single consolidated statement for all of our brands because we generally employ the same modern slavery policies and compliance program across our entire business. As used in this statement, “modern slavery” encompasses the risks posed by forced labor, prison labor, indentured labor, bonded labor, debt servitude, state imposed forced labor and human trafficking, where coercion, threats or deception are used to intimidate, penalize or deceive workers, thereby creating situations of involuntary work and exploitation. Modern slavery may also be associated with the worst forms of child labor. We conduct business in over 100 countries and most of our consolidated subsidiaries are not subject to the California Transparency in Supply Chains Act or the UK Modern Slavery Act. Business Overview Our Company Capri Holdings is a global fashion luxury group, consisting of iconic brands that are industry leaders in design, style and craftsmanship. Our brands cover the full spectrum of fashion luxury categories including women’s and men’s accessories, footwear and ready-to-wear, as well as wearable technology, watches, jewelry, eyewear and a full line of fragrance products. Our goal is to continue to extend the global reach of our brands while ensuring that they maintain their independence and exclusive DNA. At the end of fiscal 2019, we had approximately 17,797 employees, consisting of approximately 11,096 full-time employees and approximately 6,701 part-time employees, with approximately 14,319 of our employees engaged in retail selling and administrative positions, and the remaining employees engaged in other aspects of the our business. As of the end of fiscal 2019, most of our employees were located in the Americas (primarily in the United States), with the remainder located in Europe and Asia. Our Brands Versace Versace has long been recognized as one of the world’s leading international fashion design houses and is synonymous with Italian glamour and style. Founded over 40 years ago in Milan, Italy, Versace is known for its iconic and unmistakable style and unparalleled craftsmanship. Over the past several decades, the House of Versace has grown globally from its roots in haute couture, expanding into the design, manufacturing, distribution and retailing of ready-to-wear, accessories, footwear, eyewear, watches, jewelry, fragrance and home furnishings businesses. Versace distributes its products through a worldwide distribution network which includes around 190 company-operated boutiques in some of the world’s most glamorous cities. We completed our acquisition of Versace on December 31, 2018. It is generally our group’s policy that recently acquired brands have one year from the date of acquisition to adopt and implement our factory social compliance program as further discussed below. Jimmy Choo The Jimmy Choo brand, founded over 20 years ago, today enjoys a leading position in the expanding luxury footwear market and an expanding presence in the luxury accessories space. Since its inception in 1996, Jimmy Choo has offered a distinctive, glamorous and fashion-forward product range, enabling it to develop into a leading global luxury accessories brand, whose core product offering of women’s luxury shoes is complemented by accessories, including handbags, small leather goods, scarves and belts, as well as a growing men’s luxury shoes and accessories business, as well as fragrances, sunglasses and eyewear. Jimmy Choo has a global store network encompassing more than 200 company-operated stores and is present in the most prestigious department and specialty stores worldwide. Michael Kors The Michael Kors brand was launched over 35 years ago by Mr. Michael Kors, whose vision has taken it from its beginnings as an American luxury sportswear house to a global accessories, footwear and apparel company with a presence in over 100 countries through approximately 850 company-operated retail stores, e-commerce sites, leading department stores, specialty stores and select licensing partners. Michael Kors offers three primary collections: the Michael Kors Collection luxury line, the MICHAEL Michael Kors accessible luxury line and the Michael Kors Mens line. The Michael Kors Collection line establishes the aesthetic authority of the entire brand and is carried in many of our Michael Kors retail stores, on our Michael Kors e-commerce sites, and in the finest luxury department stores in the world. Our accessible luxury goods line MICHAEL Kors has a strong focus on accessories, in addition to offering footwear and apparel and is carried in all of our Michael Kors lifestyle stores, as well as leading department stores throughout the world. We also continue to develop our Michael Kors Mens business in recognition of the significant opportunity afforded by our Michael Kors brand’s established fashion authority and the expanding men’s market, and have recently entered into men’s footwear. Supply Chain Structure We have a multi-supplier strategy that provides specialist skills, scalability, flexibility and speed to market, as well as diversifies risk. All of our products are produced according to our specifications. We generally contract for the purchase of finished goods principally with independent third-party manufacturing contractors. The manufacturing contractor is generally responsible for the entire manufacturing process, including the purchase of piece goods and trim for our Jimmy Choo and Michael Kors brands. For the Versace brand, some of the piece goods and trim are separately purchased by Versace and provided to its third-party manufacturing contractors, and some are sourced directly by the third-party manufacturing contractors, as further described below. The third-party manufacturing contractors and agents for our brands operate under the close supervision of our global manufacturing divisions and buying agents located in North America, Europe and Asia. We also license to third-parties the right to use our brands’ trademarks and other intellectual property on certain products such as watches, jewelry, eyewear and fragrance, as an example. These third-party product licensees are responsible for the entire manufacturing process. Versace has a centrally managed production model for the majority of its products, and buys raw materials and components for these products. All the raw materials arrive in a central warehouse owned by Versace, and operated by a third-party, in Novara, Italy, and are distributed to independent third-party manufacturing contractors after the quality control process is completed. The vast majority of Versace’s production is located in Italy. The remaining production occurs in Bulgaria, Romania, Turkey, Tunisia, elsewhere in Europe and a small portion is produced in Asia. Jimmy Choo products are also manufactured by independent third-party manufacturing contractors. Most of Jimmy Choo’s products are produced by specialists in the Florence and Veneto regions of Italy with a small portion produced in Spain and China. Jimmy Choo has a product development facility in Florence. Jimmy Choo also has a 33% ownership interest in one factory located in Italy, which is dedicated to Jimmy Choo production. Jimmy Choo typically only purchases finished goods and does not purchase raw materials, except for development purposes. Michael Kors contracts for the purchase of finished goods principally with independent third-party manufacturing contractors that are generally responsible for the entire manufacturing process, including the purchase or piece goods and trim. Product manufacturing for the Michael Kors brand is allocated among third-party manufacturing contractors based on their capabilities, the availability of production capacity, pricing and delivery. Michael Kors also has relationships with various buying agents who source finished goods with numerous manufacturing contractors on its behalf. By dollar volume, nearly all of Michael Kors products were produced in Asia in fiscal 2019. Risks of Slavery and Human Trafficking in Supply Chain Due to the nature of our workforce and the locations of most of our employees, we believe that the risks of modern slavery in our own business are remote. While there are risks inherent with third-party manufacturing, we have established the compliance and other procedures discussed herein to mitigate the risks of modern slavery in our product supply chains. Our approach is to focus on our direct (tier 1) suppliers, since this is the level of the supply chain where we believe that we have the most influence and can therefore be the most effective. Commitment to Ethics; Codes of Conduct We are committed to principles of ethical business practice and recognition of the dignity of others, including responsible labor practices. Employee Code We have a Code of Business Conduct and Ethics (the “Employee Code”) that applies to our employees, officers and directors. In addition to indicating that employees, officers and directors must respect and obey the laws where the Company operates, the Employee Code indicates that we are